The Next “Buy The Dip” Opportunity Is Almost Here

We’ve broken to new post-financial crisis highs but you didn’t chase the market up here. You are waiting for a dip to buy, just like the rest of the world (of course, when it comes, people get scared to buy it). Well I think there is an area coming up that could provide a low risk/decent reward opportunity to get long for a play to new a high in the market.

The Chart

Below is a $SPY 30 minute chart. I am watching the 137.90-138.05 zone area for support. If we get there tomorrow (March 23) or Monday, I would expect dip buyers to step in. So far since the rally started, the pullbacks have been very shallow and the market has not given anyone the chance to buy on pullbacks. However, If the level doesn’t hold, I could easily see us going to 136.35 area.

Here is why this area is also important. It was previous resistance, which now should turn into support. Also the 20 day SMA is hanging right above that area; we could see a small dip below it and a reversal with a close above. That would be bullish and in my opinion, set us up for new highs. The RSI is also nowhere near “overbought” and is above 50, signaling that we are no way extended and in no way showing bearish signals.

Of course, we can just gap up on Friday and head higher, leaving those who did not buy today in the dust (again). However, if we do dip & hold, I would be looking to add long positions.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Jerry Khachoyan is currently an undergraduate student at UCLA pursuing a degree in Political Science. He started trading in September of 2008. He concentrates on using technical analysis and reading the tape to enter the best risk/reward trades. The stock market to him is one of the greatest inventions by man.

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